Is Donald Trump bonkers? It’s a question being asked across both sides of the Atlantic, especially with the world’s two largest economies caught in the most intense trade war in decades.
But the straightforward answer is no—Trump isn’t bonkers. His approach may seem chaotic, but there’s a strategy behind it. And truthfully, global tariff structures have long been skewed against the US.
Recently, Trump’s bold and unpredictable efforts to pressure other major economies into adjusting these imbalances have rattled financial markets. The White House hasn’t backtracked, but it has hit the brakes.
Even if Trump weathers the political backlash and financial turbulence, his broader trade vision might still falter. He’s trying to reshape the entire global trade system to benefit America—something previous presidents like FDR in the 1940s and Reagan in the 1980s also attempted.
Back then, the US was unquestionably the dominant global force—economically, militarily, and morally. It had the clout to push forward trade systems that advanced its strategic interests. Today, though, even with a determined president, America doesn’t command the same level of influence.
Trump faces another major challenge: time. He has only four years to implement his vision. And much of the US political class, the media, and traditional allies are aligned against him.
That resistance won’t go unnoticed by other nations in upcoming trade talks, many of which are keen to preserve the current system that serves them well.
Trump’s argument about trade imbalances is valid. For years, US exports to China faced significantly higher tariffs than Chinese exports to the US.
Before tensions escalated in his first term, the average US tariff on Chinese goods was 3–4%, while China’s tariff on US goods was 8–10%, citing its “developing nation” status as justification.
Before Trump’s presidency, pointing out China’s protectionism, intellectual property theft, or currency manipulation was often dismissed as politically incorrect.
But these were real issues. Trump shifted the conversation, focusing on protecting American manufacturing and winning back working-class voters who felt abandoned by earlier administrations.
By early 2025, following tariff escalations under both Trump and President Biden, US tariffs on Chinese goods averaged around 20%. But China’s retaliatory tariffs remained even steeper.
The European Union isn’t much different. EU tariffs on US goods have traditionally been higher than those levied by the US. The EU, for instance, imposes a 10% tariff on US car imports, while the US charges just 2.5% on European vehicles.
American agricultural exports to the EU also face not only high taxes but also strict regulatory barriers, alongside campaigns discrediting products like chlorinated chicken, which is actually safe.
Those calling Trump “bonkers” should recognize that the EU is a highly protectionist bloc, and its trade policies often prioritize the interests of large corporations over consumers.
If Trump’s goal is to temporarily raise US tariffs to pressure other countries into fairer trade deals—and there’s strong evidence that’s the case—then his approach is arguably justified.
It’s about encouraging a move away from entrenched protectionism, similar to what global powers aimed for at Bretton Woods in 1944, when they crafted a new economic order to overcome the damaging isolationism of the 1930s.
Trump also wants to address what his adviser Stephen Miran calls “persistent dollar overvaluation.” This mirrors the 1985 Plaza Accord, when major economies cooperated to lower the value of an overinflated dollar that was hurting US exports.
Admittedly, Trump’s tactics—imposing, delaying, then reimposing tariffs—can be jarring. And the escalating tariff battle with China has reached a near-ridiculous stage.
Last week’s surge in US Treasury yields was also concerning. It marked the biggest selloff in these safe-haven assets since the peak of the pandemic, and higher borrowing costs could ripple far beyond the US.
Still, it’s worth noting that yields are lower now than when Trump first took office.
What Trump needs most is a major political victory—evidence that his approach can work, that other nations are willing to come to the table, and that meaningful, mutually beneficial deals can result from the turmoil.
So here’s a bold prediction: despite America’s waning global dominance and the political headwinds, Trump is likely to secure new bilateral trade deals in the coming months. And the first may very well be with the United Kingdom.
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